Pakistan Corporate & Business Tax Guide 2026: Company Rates & Slabs
Navigating corporate tax in Pakistan and understanding business taxation structures is essential for company directors, sole proprietors, distributors, and partnership firms.
The Federal Board of Revenue (FBR) enforces tax obligations under the Income Tax Ordinance, 2001 based on business legal entity classification: Private Limited Companies, Small Companies (SMEs), Associations of Persons (AOPs), and Sole Proprietorships.
1. Corporate Tax Rates in Pakistan (2026)
Corporate tax rates apply to net taxable profits after allowable business expenses and depreciation:
2. Association of Persons (AOP) & Partnership Taxation
An Association of Persons (AOP) or registered partnership firm is treated as a separate taxable entity under FBR rules. The AOP calculates net business profit and pays tax under non-salaried business slabs. Once the AOP clears its tax liability, profit distributions received by individual partners are exempt from further income tax in their personal returns.
3. Minimum Turnover Tax under Section 113
Under Section 113, if a company or specified business entity incurs a net loss or pays normal income tax below 1.25% of gross turnover, it is required to pay a minimum turnover tax of 1.25% on gross revenue. Excess turnover tax paid can be carried forward for adjustment against future tax liabilities for up to 5 tax years.
4. Super Tax under Section 4C
The FBR levies a progressive Super Tax under Section 4C on high-earning entities and companies whose annual income exceeds specified thresholds:
- Income PKR 150M – 200M: 1% Super Tax
- Income PKR 200M – 250M: 2% Super Tax
- Income PKR 250M – 300M: 3% Super Tax
- Income PKR 300M – 350M: 4% Super Tax
- Income Above PKR 500M: Up to 10% Super Tax for specified sectors
5. Withholding Tax on Distributors & Suppliers
Businesses acting as distributors, wholesalers, or suppliers face advance withholding tax under Section 153 and Section 236G/236H. Active filers receive lower withholding rates on commercial invoices, while non-filers incur penal withholding deductions up to 200% higher.
Calculate commercial tax obligations on our Business Tax Calculator or explore our main Pakistan Income Tax Knowledge Hub.